Facebook Places: What It Is, What It Isn't, And Why It May Change The World

Today Facebook revealed its long-anticipated geolocation offering called “Places.” In many respects, Facebook’s offering doesn’t expand on the functionality you can find in current location-based services such as foursquare — you can check in at a place, share your location with friends, see who is nearby, and add a place.  In fact, the most important contribution Facebook is making to the geolocation social space is not in form but scale.  While foursquare counts around 2.5 million users in its base, Facebook has 500 million.  This means that Facebook is positioned to introduce the benefits of location sharing to a new and much wider audience.

Of course, providing users with a new feature is one thing, but getting them to adopt a new sort of social behavior is another.  Facebook has done much to ease the adoption process for users, starting with some smart decisions about privacy.  It is evident that Facebook has learned from past privacy missteps.  By default, when users check into a place, this information will only be shared with friends and not the whole world.  This reflects a different and more user-centric approach than Facebook has taken in the past. 

Of course, it's nearly impossible to launch any new social feature without some level of privacy concern, and it remains to be seen whether users will like or dislike the fact that they can be checked in by their friends.  Facebook says this is intended as an advantage — since not every person has an advanced smartphone, not every Facebook user can check himself or herself into a location for the time being;  by allowing people to check in their friends, more Facebook users can participate.  People can turn off the ability for friends to check them in, but by default this is permitted. 

What may be most notable about the Facebook announcement is the wide net the company has cast for partners.  Prior to Facebook’s announcement, a lot of attention was focused on how Facebook might compete with existing geolocation services, but Facebook did what Facebook does best:  It launched a platform, not just a product.  Facebook made clear that Places is a platform that will work with, rather than against, existing and new services.  In fact, Facebook shared the stage with four partners, including today's largest location-based social services — Gowalla, foursquare, Yelp, and Booyah.  Each has or will roll out improvements to its Web sites and mobile applications that use and integrate with Facebook Places. 

This open approach to location-based services can benefit Facebook by making the company the central storehouse for consumer actions in the real world.  At the same time, developers can also benefit by building on the Facebook Places platform with their own set of features that attract users.  A person might check in with foursquare because he wants to become mayor or earn a reward from a local retailer, but that user's information can still be shared with friends and become part of his history on Facebook. 

One question Facebook avoided was about monetization.  When asked how Places will make Facebook money, it instead refocused attention on the benefits to users.  There is no question that knowing where people are and what places they visit will be valuable data for Facebook and its advertisers.  It will permit Facebook to better understand individuals' likes and dislikes not simply based on what buttons they click but on their actual real-world behavior.  And knowing where an individual is at a given moment will permit Facebook to serve better and more relevant ads based on user location.  To date, Facebook has not been in the mobile advertising business, but it's easy to see how Places will change that.

The most evocative moment at the Facebook conference came when Chris Cox, Facebook’s VP of Product Management, conveyed how the new Places platform will make Facebook an even richer experience for its users today and 20 years in the future.  He shared an example of a person visiting a beach and finding out that her parents had their first kiss at that location.  Facebook is seeking to make the act of checking in more about “Here’s what I did and what happened” than “Here is where I am or was.”   By merging photos, stories, and check-ins within Places, Facebook wants to give users an even richer real-world experience.

With Places, Facebook hasn’t rewritten the social media world, but it might just rewrite the way people think about social networks.  Soon, the local restaurant or hiking trail may have as rich a personality as do the people on Facebook, not because everyone has visited but because your friends have.  And in the end, isn’t that what we really care about?  Not who is mayor of our local coffee shop, but what our friends did, said, and liked when they were there before us.  

Comments

Great post, Augie. Sounds a

Great post, Augie. Sounds a lot more promising than I thought it would be.

Awesome post, Augie! it's

Awesome post, Augie! it's going to be interesting to see how Facebook's entry into the LBSN world affects the culture of the "check-in". The one thing I'd point out is that Foursquare and Gowalla have already exposed Facebook's web user-base to location-based services and that the real comparison is Foursquare's 2.5 million users to Facebook's 150 million mobile users (which is still extremely significant). I did a blog post that looks at the potential impact of Facebook Places on Foursquare: http://bit.ly/bhMtYN and also cross-posted on Hill Holliday's blog: http://www.hhcc.com

Adoption rate

With 150 million active mobile users it's going to be interesting to see how this is taken up by Facebook's users. The partnership with Foursquare et al was intriguing too - will this play out in the long term?

We're already advising our clients at http://www.vexeddigital.com on how to make the most of the Facebook announcement - here in Europe we're hoping to learn on what happens in the US before it rolls out here.

"Fremenies" make great partners

Having thought about this for a bit, it's clear Places is now the check-in foundation for the known world. The 800 pound gorilla just landed. That said, it also clear that facebook has no interest in squashing the nascent check in industry (eg, they've been working with all the players for, it would appear, quite some time now). facebook looks like they want to extend their platform to handle the basics of check in but defer to their partners for the more value added processes.

So, what are those processes? Well clearly the "game play" component is an area of focus. Booyah has already advanced their InCrowd game. Foursquare mentioned they want to concentrate on tips and to do lists. Gowalla is happy offering stamps etc...etc...

I think ultimately, facebook will allow this to grow to a point where their partners are solidly profitable and then hit them up for ongoing fees just like the did with their virtually currency program. It's a smart strategy.

Thanks!

Tim, Mike, Neil and Mark,

I've been out of pocket all day, so I apologize for not thanking you sooner for your dialog!

Tim, I agree, Facebook launched something promising! The open platform, benefits to users, and better default privacy settings are all signs that Facebook is taking this seriously.

Mike, Neil and Mark, it is hard for me to imagine that Facebook won't become the standard for LBS. Why would someone checkin via Yelp, Foursqaure or Gowalla and NOT link these to their established social graphs on Facebook.

And I appreciate your points about the adoption rate. All 500M Facebook users won't jump into the deep end of the Places pool at once. This is only available in the US and only to advanced smartphone users, so it will take time for Places to percolate throughout the Facebook user base.

Thanks for the input. I appreciate the observations and insights!

Excellent analysis

Augie, great to see such a thoughtful analysis of Places. I'm really looking forward to seeing what services launch on top of Facebook's Places APIs. The scale Facebook brings will transform how marketers are able to interact with consumers on location.